Saturday, March 6, 2010

Questions for an Economics Expert

Why is it that if I were to print up a boatload of very fine currency, and inject it into the monetary supply chain in order to boost economic activity, it would be considered felony counterfeiting; but if the federal government does exactly the same thing, it’s considered a perfectly acceptable economic stimulus plan?

What if I were to use my currency to make low interest loans to small businesses?

Petty legalisms aside, just what is the difference between my acts and those of the government?

And why is it that if I take out a high interest loan that I have virtually no chance of being able to pay off, in order to buy a new house and a new car to stimulate the economy, the resulting “instruments” will be considered “sub-prime” and “toxic assets?” 

But if the federal government takes out loans that it has virtually no chance of being able to repay, in order to buy all sorts of things to stimulate the economy, it’s considered to be “investing” and a bold stroke for economic “recovery"?

In principle, is there any difference between the two acts?

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